Circle Responds to CPMI Consultation on Cross-Border Payments

This week, Circle submitted its response to the Committee on Payments and Market Infrastructure (CPMI) and Payments Interoperability and Extension (PIE) Taskforce answering G-20 calls to enhance global access to fast, affordable, and transparent cross-border payments. This consultation represents an opportunity to enhance public-private partnership in developing innovative solutions to longstanding challenges in speed, cost, and accessibility.

The G20’s roadmap for improving cross-border payments has laid a solid foundation for addressing inefficiencies in international payment systems. However, significant challenges remain, particularly in retail payment flows and those to underbanked regions. Circle’s response advocates for how regulated stablecoins, such as USDC, can overcome challenges in meeting the G-20’s global targets for reducing the cost of cross-border payments to three percent and settlement time to less than one hour.

Private Sector Solutions for Cross-Border Payment Challenges

Circle highlighted the critical role of private-sector initiatives in addressing inefficiencies in cross-border payments, particularly at the retail and remittance levels. Over the last two decades, private payment service providers have introduced solutions that reduce settlement delays and enhance efficiency. However, these innovations remain constrained by structural frictions in legacy wholesale settlement networks, such as high intermediation and widespread derisking of correspondent banking relationships.

The advent of distributed ledger technology (DLT) and tokenized settlement systems has introduced inherently global settlement options, allowing cross-border transactions to be processed at speed and scale. Regulated payment stablecoins like Circle’s USDC and EURC offer meaningful step increases, including:

• Near-Instant Settlement: Stablecoins facilitate real-time currency conversions, reducing foreign exchange settlement risks and intermediary costs.
• Reduced Remittance Costs: USDC enables cross-border remittances at a fraction of the cost of traditional payment rails, with reduced fees compared to traditional payments even in the most competitive corridors.
• Humanitarian and Development Aid: Stablecoin-based payment systems enhance aid delivery to underbanked and unbanked populations by ensuring speed, accountability, and traceability.
• Traceability and Programmability: USDC’s public blockchain infrastructure provides real-time, end-to-end transaction visibility. Programmability allows for purpose-bound payments and precise fund control, supporting financial inclusion for unbanked populations.

As a regulated issuer of stablecoins, Circle has processed over $20 trillion in USDC transactions and enabled local fiat integrations in 185 countries. This track record highlights the potential of stablecoins to meet the G20’s objectives of faster, cheaper, and more transparent retail payments.

Challenges and Priorities for Safer and More Efficient Cross-Border Payments

While the G20’s roadmap has made significant progress in improving cross-border payments, several persistent challenges require attention. Circle’s response identified structural bottlenecks, inefficiencies in compliance processes, and the need for greater interoperability as key barriers to achieving the roadmap’s goals.

• Addressing Bottlenecks: Retail cross-border payments often face high costs and delays due to complex traditional payment flows. 
• Enhancing Compliance: Simplifying AML/KYC processes through blockchain-based digital identity solutions and programmable features is critical for efficiency.
• Improving Interoperability: Circle advocated for unified standards and harmonized frameworks to reduce fragmentation, and streamline AML systems and cross-border payment integration.

View Circle’s full response to the CPMI Consultation on Cross-Border Payments.